Casino: Politician lost $500,000 on slot machines

Cook County Commissioner William Beavers talks to reporters, as his attorney Sam Adam Jr. listens, after Beavers' arraignment March 2, 2012, on federal tax-evasion charges in Chicago.

CHICAGO – A powerful Chicago politician who earns just a five-figure salary gambled away nearly $500,000 playing slot machines over three years at a single casino, according to records entered into evidence by prosecutors Friday at the Democrat’s tax-evasion trial.

William Beavers, whose annual salary is $85,000 as a Cook County commissioner, lost $200,000 in 2006, $196,000 in 2007 and more than $80,000 in 2008 – net loss figures that factor in his winnings from the Horseshoe Casino in Hammond, Ind., said former casino employee Janet Guerrero, citing records during testimony.

Beavers, 78, is accused of diverting more than $225,000 from his campaign coffers to feed his gambling habit and for other personal use without reporting much of it on his 2006 through 2008 federal tax returns. He’s pleaded not guilty to four federal tax counts, each of which carries a maximum three-year prison term.

By highlighting his enormous gambling losses, prosecutors are providing one possible motive for why Beavers sought to evade his taxes: that he was in financial straits and required huge infusions of cash. As a heavy gambler at Horseshoe Casino, southeast of Chicago, the ex-police officer and onetime alderman held the casino’s highest customer status; as a Seven Star Club member he had many perks, including free steaks, show tickets and even trips, Guerrero said.

Beavers sometimes lost hundreds of dollars at a single slot machine sitting, losing $400 at one machine in a single day in 2006.

He didn’t always lose: On another day in 2006, he hit the jackpot on one slot machine and he won $1,200, Guerrero said, who explained casinos closely track customers’ losses and winnings.

During opening statements Thursday, prosecutors displayed three $2,000 checks Beavers wrote to himself withdrawing $6,000 from his campaign fund while at the Horseshoe Casino on April 9, 2007. But on an election board form later, Beavers declared the $6,000 went toward campaign expenses.

Defense attorney Sam Adam Jr. is seeking to convey to jurors that Illinois law doesn’t bar politicians from using campaign money on gambling. In his opening, also on Thursday, he noted the law does bar spending the cash on personal laundry.

“You can’t take money out for dry cleaning,” he told jurors. “You know how much money he spent on dry cleaning? Not one dime!”

Regarding the law on expenditures, Adam added: “If it’s not in the statute, you can use it.”

But when the attorney raised that issue Friday during cross-examinations, Judge James Zagel stopped him. Beavers isn’t accused of violating any campaign law; he’s accused of not declaring money spent on gambling as income.

“The issue in this case is whether there was a violation of the law in federal tax law,” the federal judge told jurors when Adam mentioned the Illinois law in a question. “State law is not at issue here.”

State law does list 11 specific prohibitions, including No. 5 on the list, which prohibits campaign money spent on “personal laundry expenses.” And nowhere does it say money cannot be spent on gambling.

David Morrison, of the Illinois Campaign for Political Reform, said in a phone interview Friday that some campaign committees put funds in money markets or other investments, which is legal. And he said a politician could argue that betting money on a horse race or at a black jack table was a kind of investment.

“And, if you made money, you would presumably have to give it back to the campaign fund,” said Morrison, who is not linked to the trial.

He said the current law is a good one as it is, and that the law is purposely not overly stringent.

Under it, he said, a campaign committee would be obliged to declare that a politician spent campaign money on gambling. Beavers allegedly did not do that, according to prosecutors.

“If you do disclose that you gambled campaign funds and voters say, ‘That’s awesome,’ and vote for you, that’s their decision,” Morrison said.